VNET Group, Inc. · NASDAQ:VNET
VNET — 21Vianet Group — Investor Presentation (August 2019)
26 slides from VNET's investor presentation, August 2019
Slide 1: 21Vianet Group, Inc. Investor Presentation
21Vianet Group, Inc. Investor Presentation August, 2019
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of 21Vianet Group, Inc. (the “Company”) in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be
Slide 3: At a Glance
At a Glance Inception Time In 1996 Listing Time Apr, 2011 Exchange / Ticker Nasdaq: VNET Price (as of Aug 13, 2019) $ 7.23 Market Cap $ 813 Million
Slide 4: A Leading Internet Data Centre Services Provider in China
A Leading Internet Data Centre Services Provider in China Market • China's internet infrastructure industry is among the fastest growing in the world. • Carrier-neutrals internet data centers (IDC) are growing faster than the industry average. Leadership • VNET is a leading carrier-neutral & cloud-n
Slide 5: Comprehensive Customized Solutions
Comprehensive Customized Solutions IDC Services Core Business Product Offering 60%-70% of total revenue Our Advantages Co-location Multi-carrier & multi-cloud connectivity Inter-connectivity High-performing facility & network Hybrid IT service Turn-key solutions tailored for customer nee
Slide 6: Investment Highlights
=e ae Investment Highlight
Slide 7: Investment Highlights
Investment Highlights Hyper Growth Market for IDC Services in China Trusted Brand and Clear Leadership High Entry Barriers Recurring Revenue & Diversified Customers Sustainable Growth & Profitability Strong Support from Shareholders and Partners 7
Slide 8: Hyper Growth Market for IDC Services in China
Hyper Growth Market for IDC Services in China Continuing Drivers of Demand China IDC Market Size (US$ bn) Internet Connectivity Cloud Computing Strong growth in mobile internet Data centre demand 35.4 penetration, Internet- driven by the huge 28.5 of-things, Artificial growth of cloud 23.0 18.5 Inte
Slide 9: Trusted Brand and Clear Leadership
Trusted Brand and Clear Leadership Certification We build and operate our data centers in compliance with high industry standards in order to provide our customers with secure and reliable environments necessary for optimal internet interconnectivity. Inter- ISO/IEC 20000 ISO/IEC 27001 ISO 22301 ISO
Slide 10: Trusted Brand and Clear Leadership (cont.)
Trusted Brand and Clear Leadership (cont.) China IDC Market Share in 2017 (1) Carrier-Neutral accounts for 46% Market (1) Carrier-Neutral Market: top 6 players represent ~70% share in Tier-1 cities (1) 21Vianet Other Carrier-neutral Carrier A 16% 25% 30% or Carries- Market Size YoY Growth neutral 21
Slide 11: High Entry Barriers
High Entry Barriers Resources Government-approved licenses or permits as prerequisites for data center, cloud and VPN Operating Efficiency Access to limited power quota in Tier-1 cities with Experienced operators being able to build and operate high data center demand data centers with low PUE
Slide 12: Recurring Revenue and Diversified Customers
Recurring Revenue and Diversified Customers Around 2,000 enterprise customers, 70% of Internet customers, and 30% GOE & Financial customer Recurring revenues contributing to over 90% of net revenues since IPO Low concentration risk with top 20 customers contributing 32.2% of revenue in 2Q19 So
Slide 13: Sustainable Growth and Profitability
Sustainable Growth and Profitability +11.5% +14.3% +10.6% min FY16: 2,669 FY17: 2,975 FY18: 3,401 FY19 min: 3,760 Key Growth Drivers (CNY mm) • Increase in cabinet capacity • Improvement on Hosting 828 870 902 872 888 MRR(1) due to higher adoption 759 766 801 670 699 703 707 743 of value-added servi
Slide 14: Strong Support from Shareholders and Partners
Strong Support from Shareholders and Partners ■ In 2014, a combined strategic investment from Kingsoft, Temasek and Xiaomi ■ TUS Holdings is an S&T investment holdings Shareholders group established in reliance on Tsinghua ■ As of Dec 31, 2018, Xiaomi has become the single largest customer of the co
Slide 15: Strong Support from Shareholders and Partners (cont.)
Strong Support from Shareholders and Partners (cont.) Major beneficial ownership of our ordinary shares, as of Feb 28, 2019; Principal Shareholders: % of Share Holding % of Voting Power Tuspark Innovation Venture Ltd. 21.2 50.9 Esta Investments Pte Ltd (Temasek) 9.6 2.9 King Venture Holdings Limit
Slide 16: Financial Overview
Financial Overview
Slide 17: Revenue Growth Supported by Capacity, MRR & Utilization
Revenue Growth Supported by Capacity, MRR & Utilization Net Revenues & Cabinets (1) IDC MRR per Cabinet (2) (CNY) (Net Revenues in CNY mm) 8,788 8,663 902 872 888 8,271 8,384 8,457 870 7,905 828 7,817 7,766 30,303 30,654 30,578 31,111 29,149 4,915 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 4,942 4,943
Slide 18: Margin Improvements through Efficiency Enhancement
Margin Improvements through Efficiency Enhancement Adjusted Cash Gross Profit & Margin (1) Adjusted EBITDA & Margin (2) (CNY mm) (CNY mm) 45.5% 29.4% 44.5% 43.9% 41.9% 27.0% 26.7% 22.6% 1,513 1,248 918 671 364 404 221 261 2017 2018 2Q18 2Q19 2017 2018 2Q18 2Q19 Adjusted Cash Gross Profit Margin % Ad
Slide 19: CAPEX Plan For Business Expansion
CAPEX Plan For Business Expansion Capital Expenditures (1) Capital Expenditures Policy (CNY mm) • 2019 Total Capex range: RMB1.4 bn - RMB1.6 bn: - RMB800 mm - RMB1,000 mm associated with 6,000 - ~600 8,000 self-built cabinets addition, mostly in Tier-1 cities; - RMB600 mm for IDC capacity expansion
Slide 20: Capital Structure, Credit Stats and Cash Flow
Capital Structure, Credit Stats and Cash Flow Gearing Ratio (CNY mm) Operating Cash Flow 55.5% 59.0% 47.5% 51.9% 44.8% 705 487 217 160 58 (3) (3) (4) 2015 2016 2017 2018 1H19 2015 2016 2017 2018 1H19 Total Debt (1) / Adjusted EBITDA Adjusted EBITDA Interest Coverage (2) 9.9x 4.9x 4.8x 4.3x 3.4x 3.3x
Slide 21: 2Q19 Financial Highlights
2Q19 Financial Highlights CNY'000 2Q18 1Q19 2Q19 YoY QoQ Net revenues 828,317 871,859 888,020 7.2% 1.9% Gross profit 229,433 240,775 228,248 -0.5% -5.2% Adjusted cash gross profit(1) 364,008 406,670 403,809 10.9% -0.7% Adjusted cash gross margin 43.9% 46.6% 45.5% 1.6 bps -1.1 bps Operating profit 51
Slide 22: Guidance
Guidance CNY mm 3Q18 A 2Q19 A 3Q19 E YoY(1) Revenues 870.1 888.0 950 - 980 10.9% Adjusted EBITDA 245.2 260.7 250 - 270 6.0% CNY mm 2018 A 2019 E YoY(1) Revenues 3,401 3,760 – 3,860 12.0% Adjusted EBITDA 918 1,000 – 1,100 14.4% Source: Company filings 1. YoY represents the midpoints of the guidance r
Slide 23: Pipeline Status
Pipeline Status IDC Pipeline Capacity (1) Status 2019 2020 2021 Chengdu Ready for Sale ~500 Beijing West Under Construction ~1,900 ~1,900 Beijing East I Under Construction ~1,300 Beijing East II Under Construction ~2,200 Beijing South Pending for Inspection ~1,000 Shanghai SJ Under Construction ~1,4
Slide 24: Thank You!
Contact Information: Company website: Thank You! http://www.21vianet.com Email: [email protected] IR Contacts: Rene Jiang Leading carrier -neutral & cloud - Julia Jiang neutral service provider in China
Slide 25: Appendix
Appendix
Slide 26: Our Nationwide Data Centers
Our Nationwide Data Centers BJ 1 BJ 7 63% 19% 18% SH 1 SZ 2 SH 4 GD 1 ZJ 2 Source: Company Data as 31st Dec 2018. 26 The demographic displayed on the map only represent the range of company’s self-built data center.